The Civil Service Superannuation Board office has been contacted by members who are concerned that their pensions under the Civil Service Superannuation Fund are in danger because of possible changes to pension legislation in the province.
Their concern relates to changes that have been recommended to The Pension Benefits Act and Regulations. This legislation provides pension rules that apply to all pension plans registered in Manitoba, including the Civil Service Superannuation Fund. The Pension Benefits Act recently underwent a regularly scheduled review, which resulted in a number of recommended changes. These recommendations are now open for public consultation.
The recommendation that has caused concern among some plan members is the proposal of enabling legislation that would permit plans to operate as Target Benefit or Shared Risk Plans.
The change being discussed does not convert existing defined benefit plans to target benefit/shared risk plans. This change would simply provide another plan design option for employers who want to create a pension plan for their employees, or for sponsors of existing pension plans who want to change the type of plan they provide.
You may have heard over the years that defined benefit plans are very expensive for plan sponsors, and that many have converted their plans to defined contribution plans as a result. The introduction of target benefit/shared risk plans as a permissible plan design in Manitoba would provide an alternative design option for those plan sponsors who are planning to convert their plans.
The Pension Benefits Act provides significant protection of pensions that have already been accrued. Amendments that would reduce pension benefits under a plan or convert the plan to a different type of design are only permitted on a go-forward basis, and the changes that are being discussed do not impact the sections of The Pension Benefits Act that provide that protection.
Information provided by the MGEU indicates their concern that permitting target benefit/shared risk plan designs in the province will result in the conversion of the Civil Service Superannuation Plan. To the best of our knowledge, there are no ongoing discussions within the Civil Service to do so.